NCLT allows ICICI Bank's Rs 7-bn claim in Era Infra insolvency case

The Principal Bench of the National Company Law Tribunal (NCLT) on Thursday directed the resolution professional (RP) of Era Infrastructure India to admit ICICI Bank's Rs 7-billion claim, which had been earlier denied by him. The tribunal has also directed the RP to grant ICICI Bank a proportional voting share in the committee of creditors (CoC).

ICICI Bank had given a loan of Rs 2.4 billion to Era Infrastructure India and Rs 4.6 billion to Dehradun Highway Projects and was liable to get a repayment from the corporate debtor according to the terms of the agreement between the parties. The RP of Era Infrastructure had, however, denied this claim, saying that the agreement could not be construed as akin to guarantee of repayment.

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The NCLT, however, rejected the RP's arguments and said that once the corporate debtor had undertaken such obligations, the claims against the same could not be denied to the lender.

"Once it is an amount repayable, then the resolution professional must admit the claim of ICICI Bank as financial debt, in respect of the obligations undertaken by the corporate debtor under the credit facilities availed (of) by Era Infrastructure India Ltd and Dehradun Highway Project," the tribunal said in its order.

The NCLT had in May ordered initiation of insolvency proceedings against Era Infrastructure on a plea moved by Union Bank of India, which had sought to recover Rs 6.8 billion, along with an overdue external commercial borrowing of $11.97 million. In total, the firm owes its lenders nearly Rs 100 billion.

The infrastructure company was among the list of 12 large loan defaulters identified by the Reserve Bank of India (RBI) last year. RBI had in June last year identified 12 such large defaulters and asked their lenders to take them to bankruptcy courts.